Chancellor denies tax split with Cameron

Tuesday 26 July 2011 13:47 BST

George Osborne and David Cameron denied they were divided over economic policy today but appeared to take different lines over tax.

The Chancellor again held out the prospect of income tax cuts this afternoon - just a day after Mr Cameron appeared to rule them out. Amid reports that officials in 10 and 11 Downing Street have clashed over growth policies, the Chancellor declared: "We want a competitive tax system."

Mr Osborne added: "If we want to keep it competitive, we want to keep Britain a place where individuals and businesses want to come and create wealth and create jobs."

His words contrasted with the Prime Minister speaking at a press conference yesterday who, when asked about the prospect of tax cuts, replied that there was "no margin for tax cuts and spending increases".

Treasury sources have not ruled out an early move to abolish the 50p tax rate on high earners and The Evening Standard revealed yesterday that it could be signalled in next year's Budget.